A key reason for the yellow vest protests was that poorer households would have been proportionally more impacted by the proposed fuel tax increases. Carbon taxes are generally regressive, i.e. impose proportionally higher costs on poorer households.
If the policy objective was indeed to tax carbon fuels to discourage their use the French government could have proposed a carbon fee-and-dividend, i.e. a carbon fee that would be distributed equally to all citizens. This policy results in progressive outcomes, i.e. the costs of the policy would have primarily been imposed on richer households. It would have had the same effect on carbon fuel consumption, but at the same time it would have made the yellow vest protesters better off financially.
This 2020 paper suggests that the implications of a cap-and-dividend policy were largely unknown to the French public, i.e. it was perceived as regressive just like the fuel tax increase. But I doubt that the French government was unaware of the implications of a carbon fee-and-dividend, which are widely studied and proven.
Are there any indications that the French government considered, but ultimately discarded, this policy option?
